SALINAS, Calif., Nov. 26, 2024 /PRNewswire/ -- Scheid Vineyards Inc. (dba Scheid Family Wines) (OTC Markets: SVIN) announced today its financial results for the six months ended August 31, 2024 (second quarter of fiscal 2025).
Scott Scheid, President and CEO, commented, "It continues to be a difficult time for the wine industry. Bulk wine prices remain depressed and the market for cased goods, which has been impacted by distributor and retailer destocking, continues to be challenging. As a company, we've made significant efforts to do more with less, highlighted by our second quarter results showing a decrease of 16% in sales and marketing expenses and a decrease of over 5% in G & A. These efforts are ongoing and I'm proud of our teams who work each day on finding opportunities for growth and ways to improve our business."
Mr. Scheid continued, "We recently executed new forbearance agreements with our lenders extending through July 31, 2025. The terms of these agreements include forbearing interest and principal payments on the Company's existing debt. In addition, under the agreement with our operating lender, the Company received an additional $5.0 million to strengthen our working capital base."
Financial Results
Total revenues decreased 6%, to $26.1 million for the six months ended August 31, 2024, from $27.7 million in fiscal 2024. Cased goods sales decreased 6%, to $21.2 million in the first six months of fiscal 2025, from $22.5 million in fiscal 2024, as the bottled wine business across the entire market slowed in the first few months of calendar 2024. The Company's bulk wine sales decreased 14%, to $1.8 million from $2.1 million, and winery processing and storage revenues remained flat at $1.5 million. Gross margins remained at 20% for each period.
Sales and marketing expenses decreased 16%, to $4.8 million, from $5.7 million, and general and administrative expenses decreased 5%, to $3.5 million, from $3.7 million, as the Company continues its cost-cutting efforts.
During the first quarter of fiscal 2025, the Company recognized revenue of $3.6 million from proceeds received from the dissolution of a winery processing agreement. In addition, the Company recognized a gain from the sale of non-vineyard land in the amount of $1.7 million in the second quarter of fiscal 2025.
Interest expense rose 150%, to $7.5 million, from $3.0 million, due to increases in interest rates as each of the Company's lenders are accruing interest at the default rate of an average of 14.3%.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $4.4 million, from a loss of $1.2 million, primarily from the sale of land and the proceeds from the contract dissolution.
In total, the Company reported a net loss of $3.9 million for the six months ended August 31, 2024, compared to a net loss of $4.8 million for the six months ended August 31, 2023.
SCHEID VINEYARDS INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 2024 AND 2023
(amounts in thousands, except per share data)
Six Months Ended August 31,
2024
2023
REVENUES:
Cased goods sales
$
21,233
$
22,539
Bulk wine sales
1,826
2,145
Winery processing and storage revenues
1,508
1,451
Direct sales revenues
1,340
1,329
Vineyard management revenues
203
229
Other revenues
7
5
Total revenues
26,117
27,698
COST OF SALES
(20,962)
(22,121)
GROSS PROFIT
5,155
5,577
Sales and marketing expenses
(4,790)
(5,696)
General and administrative expenses
(3,545)
(3,674)
LOSS FROM OPERATIONS
(3,180)
(3,793)
Interest expense, net
(7,489)
(3,008)
Proceeds from contract dissolution
3,613
—
Gain on sale of property, plant and equipment
1,690
80
Other income (loss)
2
(40)
LOSS BEFORE BENEFIT FROM INCOME TAXES
(5,364)
(6,761)
BENEFIT FROM INCOME TAXES
1,509
1,915
NET LOSS
$
(3,878)
$
(4,846)
NET LOSS PER SHARE
$
(4.23)
$
(5.31)
WEIGHTED AVERAGE SHARES OUTSTANDING
916
912
About Scheid Family Wines
Scheid Family Wines, a family-owned and operated wine company for over 50 years, is ranked among the top 25 largest wine producers in the United States. Based in Monterey County, California, Scheid is vertically integrated to bring high quality estate grown wines to the marketplace from its sustainably and organically certified vineyards and grower partners throughout the Central Coast. Scheid's innovative, luxury-level winery is 100% powered by renewable wind energy generated by a 400-foot-tall wind turbine, which also supplies energy to the local community. The Scheid Family Wines globally distributed brand portfolio includes Scheid Vineyards, Sunny with a Chance of Flowers, VDR (Very Dark Red), Grandeur (organically certified), Fog & Light, Metz Road, District 7, Ryder Estate, and HOXIE, a premium wine spritzer. Scheid Family Wines sells internationally to over 30 countries and is one of the largest producers of premium exclusive brands.
